Automobile manufacturers and a union representing thousands of auto workers have finally reached a deal on recent strikes in the country. The strike which affected big players like VW, GM, Nissan, BMW, Daimler and Toyota, came to an end when automakers agreed to pay employees a 10% increase in wages for the first year, and 9% in the next two years.
This is slightly lower than their demands of 15%, which is also higher than the country’s inflation rate which stands at 4.2% in July. Automobile Manufacturers Employers Organization (AMEO) initially offered a 7% increase in the first year and a rise equal to consumer price inflation in the remaining two years, which was swiftly rejected by National Union of Metalworkers of South Africa (NUMSA).
The deal was made just in time as the strike has led to the loss of production of 17,000 vehicles and continuation of the strikes would have caused major disruptions. South Africa’s auto industry accounts for 6 to 7 per cent of the country’s GDP, producing around 420,000 vehicles a year. Half of this is exported to other African states, Europe and North America.